Sunak’s Conservatives are the party of zero growth

We might get a new nuclear power station one day, unless the protestors or the Supreme Court find a way to block it. We will plough on with High Speed Rail 2 regardless of its mounting cost. And there will be some re-heated waffle about supporting technology and innovation, complete with misty-eyed homilies to Alexander Fleming and John Logie Baird that could have been lifted word for word from any chancellor’s speech over the last fifty years. And, er, that was about it. In his Autumn Statement today, Jeremy Hunt had nothing to say about growth – because, in reality, Rishi Sunak’s Conservatives have become a zero-growth party.

In the end, it was probably not as bad as some of the advanced leaks suggested it might be. The Office for Budget Responsibility (OBR) managed to keep the black hole down to just above £50 billion, while the bulk of the tax rises were imposed on the top earners, with the 45 per cent threshold reduced to £125,000, and on anyone unlucky to be in the energy business. Meanwhile the rest of us will be squeezed with frozen thresholds. At least there was not a wealth tax, or a full-scale raid on capital gains tax, or any increases in VAT or income tax. Given the task of balancing the books Hunt and his leader Rishi Sunak set themselves, it was perhaps the most that could be expected.

Yet by far the weakest section of Hunt’s speech was when he tried to explain how he still believed in growth. Lame, feeble and despairing would be the kindest words to describe the policies he presented. A nuclear power station, if it ever gets built, would be nice. HS2 seems mostly irrelevant, but continues anyway. And embracing Brexit freedoms to promote innovation would be fine if it ever happened. So far, there has been very little sign of it.

The rest of the Statement was devoted to tax rises and welfare increases that we know will hurt the economy. A 45 per cent top rate at £125,000 will deter some executives from moving here and will encourage some self-employed professionals to work less. The windfall taxes, imposed in an arbitrary way, will make the UK a less attractive place to invest. And the frozen personal tax thresholds will discourage the million people who have left the labour market since the pandemic from ever coming back. We know for certain all that will deter expansion. The only room for debate is by how much.

In reality, Sunak's Conservatives have become a zero-growth party; they might as well ask Greta Thunberg to join – if it were not for the nuclear power station she might even accept their invitation. They have nothing to offer business and entrepreneurs. They have no ideas on how to create new industries, nor are they willing to offer any incentives to do so. Sure, the Tories can deliver stability, and keep the global bond markets happy. But what about the rest of us?